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A repurchase or buyback of a share is a decision by a business to buy its own shares from the market. Such a move can contribute to
1.    It reduces the number of outstanding shares of the company. 
2.    It tends to increase the price of remaining shares.
3.    It is often undertaken when the company's shares are undervalued.
Select the correct answer code:
  • a)
    1 and 2 only
  • b)
    1 and 3 only
  • c)
    2 and 3 only
  • d)
    1, 2, 3
Correct answer is option 'D'. Can you explain this answer?
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A repurchase or buyback of a share is a decision by a business to buy ...
What is a share buyback?
  • A share repurchase or buyback is a decision by a company to purchase its own stock from the market. Such a move reduces the number of outstanding shares of the company and tend to push up their price and is often undertaken when management considers the company's shares undervalued.
  • It is also a key way to transfer surplus earnings to shareholders and tends to lead to an increase in share prices.
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A repurchase or buyback of a share is a decision by a business to buy ...
Repurchase or Buyback of Shares:

1. Reduces Number of Outstanding Shares:
- When a company repurchases its own shares, it reduces the number of outstanding shares in the market.
- This reduction in the number of shares can lead to an increase in the company's earnings per share (EPS) and improve financial ratios.

2. Increases Price of Remaining Shares:
- With a decrease in the number of outstanding shares, the demand for the remaining shares may increase.
- The increase in demand can lead to a rise in the price of the company's shares, benefiting existing shareholders.

3. Undertaken When Shares are Undervalued:
- Companies often repurchase shares when they believe that their shares are undervalued in the market.
- By buying back undervalued shares, the company can show confidence in its own stock and potentially increase shareholder value in the long run.
Therefore, a repurchase or buyback of shares can have multiple benefits for a company, including reducing outstanding shares, increasing share price, and signaling confidence in the company's valuation.
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A repurchase or buyback of a share is a decision by a business to buy its own shares from the market. Such a move can contribute to1. It reduces the number of outstanding shares of the company.2. It tends to increase the price of remaining shares.3. It is often undertaken when the companys shares are undervalued.Select the correct answer code:a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2, 3Correct answer is option 'D'. Can you explain this answer?
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